tag:blogger.com,1999:blog-78979071311661652652018-05-18T12:50:01.161+00:00Dood NewsNews blog of Debt on our Doorstep - the campaign for fair financeDamon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.comBlogger131125tag:blogger.com,1999:blog-7897907131166165265.post-53221517696213167022012-12-05T17:45:00.001+00:002012-12-05T18:26:13.066+00:00This is an historic moment, but more could be done right now to tackle rip off lenders<div align="justify"><span style="font-family: Arial,Helvetica,sans-serif;">After fifteen years of campaigning on the issue, we are delighted that Government today included provisions within the Financial Services Bill to provide regulators with the power to cap the cost of credit agreements.</span></div><div align="justify"><span style="font-family: Arial,Helvetica,sans-serif;">The Government amendment sets out a general power for the new Financial Conduct Authority to make rules that:</span></div><ul><li><span style="font-family: Arial,Helvetica,sans-serif;">Prohibit the charging of certain types of fees which it considers to be unacceptable; and</span></li><span style="font-family: Arial,Helvetica,sans-serif;"><br /></span><li><span style="font-family: Arial,Helvetica,sans-serif;">Prohibit the charging of costs above an amount which it specifies as unacceptable.</span></li></ul><div align="justify"><span style="font-family: Arial,Helvetica,sans-serif;">Further to this, the FCA is to be provided with a power to prohibit ‘rollover’ lending, which is commonly used by payday lenders.</span></div><div align="justify"><span style="font-family: Arial,Helvetica,sans-serif;">In the event of a breach of any such rules, agreements will be unenforceable, with any payments made by the borrower recoverable from the lender, and the lender will be liable to pay compensation to the borrower.</span></div><div align="justify"><span style="font-family: Arial,Helvetica,sans-serif;">Welcoming the Government amendment, Damon Gibbons, said:</span></div><div align="justify"><br /></div><div align="justify"><span style="font-family: Arial,Helvetica,sans-serif;"><i>“This is an historic moment. After fifteen years of pointing out how money lenders have been exploiting the poorest households we finally have cross party agreement that direct action to cap prices and prevent other abuses is needed . The legal loan sharks are now on borrowed time. However, we have to move forwards as a matter of urgency and the FSA should now launch a consultation to help shape the new rules as early as possible.</i></span></div><div align="justify"><br /></div><div align="justify"><span style="font-family: Arial,Helvetica,sans-serif;"><i> But more can and must be done now to protect consumers. The FCA will not be taking on the responsibility for the regulation of consumer credit until 2014. In the meantime, and faced with a possible future crackdown, many money lending companies will inevitably take one last opportunity to rip off some of the poorest households in the country.</i></span></div><div align="justify"><br /></div><div align="justify"><span style="font-family: Arial,Helvetica,sans-serif;"><i>To prevent this, the Office of Fair Trading should immediately revise its Irresponsible Lending Guidance by indicating a level of credit costs the charging above which it will take as prima facie evidence of an irresponsible lending business model. We recommend that these ‘benchmark costs’ be initially set at £20 per £100 lent for payday loans and £65 per £100 lent for door to door money lenders.</i></span></div><div align="justify"><span style="font-family: Arial,Helvetica,sans-serif;"><i>It is now six years since the Competition Commission found that home credit lenders were making excess profits. At the time of the Commission’s inquiry, Provident Financial was charging £65 per £100 lent. It is now charging £82 per £100 lent, yet its cost of capital have not increased significantly and, with improved data sharing in place across this sector it has better information available to it to assess the risk of default. By our calculation, Provident has made at least £30 million in excess profit in the past two years alone. Insisting it reduces its prices back to the level charged in 2006 would be a good start on delivering on the promises to tackle the money lenders made in Parliament today."</i></span></div>Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-84098090101190049802012-11-29T14:48:00.006+00:002012-11-29T14:48:57.853+00:00Celebrate the victory! But now the hard work beginsTime is running out for legal loan sharks in the UK. On Wednesday night the Government finally decided to provide the new regulator, the Financial Conduct Authority (‘FCA’), with the power to cap prices in the consumer credit market. It has taken a long, hard, campaign to get here.<br /><br />In the winter of 1998, whilst working as a money adviser in the West Midlands I was asked to meet a group of lone parents to talk about the problems they faced in the run up to Christmas. They told me about the way many of them were targeted by door to door money lenders like Provident Financial, and how those loans, which carried a cost of £65 for every £100 they borrowed, meant they subsequently struggled to heat the home and in some cases feed themselves properly. They told me how a loan taken in haste to buy Christmas presents for the kids would rapidly lead to a cycle of borrowing to pay off borrowing; to hopelessness and depression. It was that group of lone parents who convinced me that something needed to be done.<br /><br />Working with other money advisers we managed to get some media attention that year and that brought with it the support of a great many local church and community groups who were also starting to take action on the issue. In 1999, Niall Cooper, the National Co-ordinator of Church Action on Poverty and I joined forces to formalise the campaign giving it the name ‘Debt on our Doorstep’. We had two simple aims – to get an interest rate cap and force the banks to provide affordable credit to people on low incomes. And, we set ourselves two years to get the job done.<br /><br />Over all the years since, we never swayed from these basic aims, and somehow we just kept going. The campaign has been as well informed as any could be. My thanks go in particular to Professor Udo Refiner in Germany, and Professors Iain Ramsay and Toni Williams here in the UK, but we have been aided by colleagues and contacts too numerous to mention, drawn from all around the world. Their willingness to talk through how caps work in practice has been invaluable. The campaign has also remained connected to the people most affected by the problem throughout, and London Citizens and Church Action on Poverty both deserve particular credit for ensuring this has been the case. And, of course, over the past two years we were fortunate to have a simply amazing advocate for the cause in Stella Creasy MP.<br /><br />But whilst we can celebrate the fact that the new regulator will be able to take action, we also have to mourn the fact that the money lenders have been ruining the lives of our friends, families, and neighbours for all the time that Government failed to act. The fact of the matter is that things have been getting worse not better. Provident Financial, who as a result of our campaign, were found to be making an excessive level of profit by the Competition Commission in 2005, now charge £82 for every £100 they lend. And in the years since we started our work we have witnessed an explosion of payday lenders charging astronomical rates of interest with virtually no checks on whether people can afford to pay. The writing was on the cards for the industry when, earlier this month, albeit after years of slumber, the Office of Fair Trading finally stood up for low income consumers and released damning evidence of the lenders failure to comply with even the existing, and frankly woeful, rules in this respect.<br /><br />We must ensure that the FCA does a much better job. Simply changing the name on the door will not do. The FCA must now set out a clear plan of action to determine how it will use its new powers – not in concert with the lenders to enable them to carry on business as usual – but with us, and to deliver justice for hard up households across the country.<br /><br />Because justice is what this campaign has always been about. We know that the lenders borrow their money from the banks and financial markets at rates which are currently on the floor. They lend it on at sky high rates to the poorest. The FCA must now be prepared to open the box and reveal just how much money has been going from the banks to the money lending industry. Although Government’s decision to give the FCA a power to cap rates has grabbed the attention, we also won another significant victory over the Financial Services Bill this month: as Government has also agreed to require the FCA to consider how well people can access affordable credit when carrying out its duties, and has indicated that it will require banks to release details of how much lending they are doing in our poorer communities.<br /><br />So after all this time both of Debt on our Doorstep’s aims are now on the verge of being realised. What next? Work harder; follow the money, and hold the FCA to its task.<br /><br />Damon Gibbons 29/11/2012, Leicester Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-20692296039620435112010-08-02T06:44:00.002+00:002010-08-02T06:48:11.421+00:00End Legal Loan Sharking Campaign LaunchedDebt on our Doorstep is pleased to announce the start of the 'end legal loan sharking campaign' which has widespread support from MPs, campaigners and civil society groups. Further details of the campaign can be found at <a href="http://www.endlegalloansharks.org.uk/">http://www.endlegalloansharks.org.uk/<br /></a>Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-43898863894115651012010-04-28T17:48:00.003+00:002010-04-28T18:15:28.046+00:00Better Banking Campaign calls for party leaders to sign up to a programme of real financial reformTo the leaders of all parties,<br /><br />We are writing on behalf of low-income communities, third sector organisations, and small businesses across the UK These groups have suffered and continue to suffer unfairly, because financial institutions have not met their needs. We feel strongly that in return for the privilege of a banking licence, and billions of pounds of public investment, we need a new settlement between society and the financial sector.<br /><br />Around 6 million people cannot access mainstream credit –often due to having no credit history, not a bad one- and have no choice but to borrow at interest rates of up to 9,000%, leading to inescapable spirals of debt. Lack of access to banking services costs low income households av. £1,000 more a year.<br /><br />So many of us take credit for granted, with our mortgages and student loans. But low-income communities, third sector organisations and small businesses suffer from unfair access to financial services. Responsible lending, (not lending for lending’s sake) advances us socially and financially.<br /><br />Therefore, what we want is a financial sector that reaches out to support those who need the most help, and enables them to become financially independent: to build savings and pensions, to have every opportunity to flourish financially and economically. We need a system that actively encourages financial institutions to engage with low income communities, third sector organisations and small businesses.<br /><br />We call upon the BBC and participants to cover these issues in the final Party Leaders’ Debate:<br /><br /><ul><li>Requiring banks to publicly disclose where they are lending and providing services – how much and to whom – including in respect of small businesses</li><li>With this data, providing incentives and obligations for banks to serve social responsibilities, along the lines of the US Community Reinvestment Act.</li><li>Capping the amount that can be legally charged for credit </li><li>Reinvesting 1% of banks’ profits for public benefit<br /></li></ul>Many are still struggling in the wake of the recession. Don’t return us to business as usual.<br /><br /><br />Signed,<br /><br />The Better Banking Campaign,<br />Bishop Doyé Agama, Deputy Moderator, Churches Together in England, National Director, Apostolic Pastoral Association<br /><br />Black training and enterprise group<br /><br />Clifford Rosenthal, President/CEO, National Federation of Community Development Credit Unions<br /><br />Craig Dearden-Phillips MBE – Social EntrepreneurDon Smallwood MBE, Chairman of Preston Road Neighbourhood Development<br /><br />Dr Doreen Finneron MBE<br /><br />Dr Rebecca Tunstall, LSE<br /><br />Dr. Campbell Jones, Past Chair, 2008-2010, of the European Business Ethics Network (UK)<br /><br />Ed Mayo, Co-operatives UK<br /><br />Executive Director of the Faith Based Regeneration Network UK<br /><br />Geoff Mulgan, Director Young Foundation<br /><br />Hilary Willmer, founder of CROP<br /><br />Jaz Greer – Founding Director Cast Trust<br /><br />Jeremy crook OBE<br /><br />Liz Richardson, University of Manchester, Research fellow<br /><br />Maria Saur Senior Consultant/Social Anthropologist<br /><br />Marilyn Taylor, Emeritus Professor, University of the West of England<br /><br />Marion Jenner, Campaigner<br /><br />Mark Ebert, Close Brothers PLC PERSONAL CAPACITY<br /><br />Martin Sime Chief Executive SCVO<br /><br />Nigel Kershaw OBE, CEO Big Issue Invest<br /><br />Pat Conaty, Research Fellow, New Economics Foundation<br /><br />Prof. Peter Case, UWE<br /><br />Prof. Simon Lilley, Head of the School of Management, University of Leicester<br /><br />Professor Stefano Harney, Chair, 2010-2012, of the European Business Ethics Network (UK)<br /><br />Revd. Paul Nicholson, CEO, Z2K<br /><br />Roger Morton, Campaigner<br /><br />Sunny Hundal, editor Liberal Conspiracy<br /><br />The Right Revd Dr John Saxbee, Bishop of Lincoln<br /><br />African Women’s Empowerment Forum<br /><br />Council for Ethnic Minority Communities<br /><br />NorthamptonshireHuman Relations Network<br /><br />Leicestershire Ethnic Minority Partnership<br /><br />CREATE Consortium2<br /><br />Inter-Faith Forums in the South West<br /><br />2D (Support for the Voluntary and Community Sector of Teesdale and Wear Valley)<br /><br />3Gs Development Trust<br /><br />ACEVO<br /><br />Act on Carbon<br /><br />Action for Prisoners’ Families<br /><br />Acumen Trust<br /><br />Adur Voluntary Action<br /><br />African Human Right Heritage<br /><br />Age Concern Brighton and Hove<br /><br />Amazon Public Relations<br /><br />Andrew Logan Museum of Sculpture<br /><br />Anti Poverty Network Cymru (APNC)<br /><br />Apostolic Pastoral Association<br /><br />ART(ASTON REINVESTMENT TRUST)<br /><br />Asset Transfer Unit<br /><br />Avenues Group<br /><br />Bad Pony Media Group<br /><br />Barrow Cadbury<br /><br />Barrowmore<br /><br />Bassac<br /><br />Batley Resource Centre<br /><br />BCT Regenesis<br /><br />Beatbullying<br /><br />Berkshire County Blind Society<br /><br />Big Issue<br /><br />InvestB-inspiredBlack Futures Group<br /><br />Black Health Agency<br /><br />Black Neighbourhood Renewal and Regeneration Network (BNRRN)<br /><br />Blagdons Boatyard – Plymouth<br /><br />Blantyre Credit Union<br /><br />Brent Private Tenants’ Rights Group<br /><br />British Society for Rheumatology<br /><br />Brixton Advice Centre<br /><br />Brunswick Organic Nursery and Craft Workshop<br /><br />Bullbrook Community Association<br /><br />Burngreave New Deal for CommunitiesB<br /><br />urnley Pendle &amp; Rossendale<br /><br />CVSC3 Creative Consultancy<br /><br />CalibreCARE Rent Scheme<br /><br />Carnegie UK Trust<br /><br />Castlemilk Credit Union<br /><br />Catalyst Stockton CCBSCCLACDFA<br /><br />Centre for Economic and Social Inclusion<br /><br />Centre for Innovation in Voluntary Action<br /><br />Centre for Local Economic Strategies<br /><br />Centre for Responsible Credit<br /><br />Chapter 1<br /><br />Chapter Street<br /><br />Charitable Futures<br /><br />Charities Advisory Trust<br /><br />Charities Evaluation Services (CES)<br /><br />Chartered Institute of Library and Information Professionals<br /><br />Children England<br /><br />Children North East<br /><br />Children Today<br /><br />Children’s Education Safety Foundation<br /><br />Chorley and South Ribble CVS<br /><br />Christian Council for Monetary Justice<br /><br />Christian Council for Monetary Justice<br /><br />Church Action on Poverty<br /><br />Churches and Regional Commission Yorkshire and the Humber<br /><br />CLES<br /><br />Clinks<br /><br />CLYCH<br /><br />Communities and Organisations: Growth and Support (COGS)<br /><br />Communities Inc<br /><br />Community &amp; Voluntary Partners<br /><br />Community Foundation Network<br /><br />Community Hub<br /><br />Community Matters<br /><br />Community North West<br /><br />Community Sector Coalition<br /><br />Community Transport<br /><br />Community Transport (National Office)<br /><br />Community Voluntary Partners, Bolsover<br /><br />Counsel and Care<br /><br />Creating Excellence<br /><br />Creative Support<br /><br />Crisis<br /><br />CV Sector Forum<br /><br />Cymryd Rhan<br /><br />Cyrenians Derby<br /><br />Diocese Derby Millennium Network<br /><br />Derbyshire Learning &amp; Development Consortium<br /><br />Development Trusts Association<br /><br />Development Trusts Association Scotland<br /><br />Dimensions<br /><br />Directory of Social Change<br /><br />Distinctive Floristry<br /><br />Dorothy House Hospice<br /><br />Durham Rural Community Council<br /><br />EAPN (European Anti-Poverty Network) England<br /><br />Ecumenical Council for Corporate Responsibility (ECCR)<br /><br />Elzabeth Finn Care<br /><br />Emmaeus<br /><br />Engage CVS<br /><br />English Federation of Disability Sport<br /><br />Equal Access Consultancy<br /><br />Equanomics<br /><br />Escape Artists<br /><br />Euclid Network<br /><br />European Strategy Group<br /><br />Fair Finance<br /><br />Fair Pensions<br /><br />Faith Based Regeneration Network UK<br /><br />Faith in Action<br /><br />Financial Inclusion Centre<br /><br />Flourish International<br /><br />Forsters PR<br /><br />Forum 21<br /><br />Foundation<br /><br />Four Acre Trust<br /><br />Fredericks Foundation<br /><br />FunderFinder<br /><br />Gateshead Voluntary Organisations Council<br /><br />Gensing and Central St Leonards Forum<br /><br />Give A Brick<br /><br />Gloucestershire Association for Voluntary and Community Action<br /><br />Goblin Combe Environment Centre<br /><br />Goole Development Trust<br /><br />Goole Retail Chamber<br /><br />Great Places<br /><br />Groundwork<br /><br />Grove House<br /><br />Hackney Council for Voluntary Service, HCVS<br /><br />Halifax Opportunities Trust<br /><br />Hands On<br /><br />Hands on Help for Communities<br /><br />Harbour Place Day Centre<br /><br />Hastings and St. Leonards Chess Club<br /><br />Hastings Trust<br /><br />HCT Group<br /><br />Health for All<br /><br />Heeley City Farm<br /><br />Home-Start Hounslow<br /><br />Housing Justice<br /><br />Hull CVS<br /><br />ImpACT<br /><br />InterHealthInvesting for Good<br /><br />Involve<br /><br />IPPR North<br /><br />IT4CH<br /><br />JET<br /><br />JHC<br /><br />KCA<br /><br />Kensington and Chelsea Social Council<br /><br />Kent Enterprise Trust<br /><br />Key House<br /><br />Knowsley Domestic Violence Support Services<br /><br />Knowsley Housing Trust<br /><br />Lankelly Chase Trust<br /><br />Learning Through Action Trust<br /><br />Little Red Bus<br /><br />Local People Lending<br /><br />London Citizens<br /><br />London Funders<br /><br />London play<br /><br />London Rebuilding Society<br /><br />London Voluntary Service Council<br /><br />Manchester Credit Union Limited<br /><br />Marketplace Chaplains Europe<br /><br />MCCHMental Health Providers Forum<br /><br />MERCi – Ideas into action for a sustainable future<br /><br />Merton Voluntary Service Council<br /><br />Metropolitan Society for the Blind<br /><br />Middlesbrough Community Network<br /><br />Middlesbrough Partnership Financial inclusion Sub-Group<br /><br />Middlesbrough Voluntary Development Agency<br /><br />Mind<br /><br />More Green<br /><br />MyBnk<br /><br />NACUW<br /><br />National Coalition for Independent Action<br /><br />National Council for Voluntary Youth Services<br /><br />National Energy Action<br /><br />National Housing Federation<br /><br />Nautilus Welfare Fund<br /><br />NAVCA<br /><br />NAVO<br /><br />Need Not Greed<br /><br />New Directions Foundation<br /><br />New Era Enterprises<br /><br />New Horizons (Teesside)<br /><br />New Prospects<br /><br />New Start<br /><br />Newent in Bloom<br /><br />Newham Voluntary Sector Consortium<br /><br />North Moor Trust<br /><br />North West Network<br /><br />North West Tenants &amp; Residents Assembly<br /><br />North Yorkshire Learning Consortium<br /><br />Nottingham Community and Voluntary Service<br /><br />Nottinhgam Community Network<br /><br />Novas Scarman Group<br /><br />NUS<br /><br />One North West<br /><br />One Voice Network<br /><br />Open Sight<br /><br />Our Future Planet<br /><br />Over The Wall<br /><br />Penwith Community Development Trust<br /><br />Perennial<br /><br />Pixeco Ltd.<br /><br />Preston Community Network<br /><br />Preston Community Network<br /><br />Preston Road Community Association<br /><br />Prime Initiative<br /><br />Prophet Scotland<br /><br />Quaker Social Action<br /><br />Red Ochre<br /><br />Refugee and Migrant Forum of East London<br /><br />Regenerate Trust<br /><br />RENAISI<br /><br />Rhyl Youth Action Group<br /><br />Rich Regeneration<br /><br />RNIB<br /><br />Rochdale Boroughwide Housing<br /><br />Royal Society for Public Health<br /><br />Rural Action Derbyshire<br /><br />Save the Family<br /><br />School for Social Entrepreneurs<br /><br />School-Home Support<br /><br />Seafarers UK<br /><br />Sedburgh Book Town<br /><br />See Ability<br /><br />Senscot<br /><br />Shared Future Community interest Company<br /><br />Shelter Housing Aid and Research Project<br /><br />Shoreditch trust<br /><br />Snap Enterprise<br /><br />Social Enterprise Coalition<br /><br />Social Enterprise Europe Ltd<br /><br />Social Enterprise London<br /><br />Social Enterprise Support Centre<br /><br />Social Enterprise Works<br /><br />Social Enterprises Working Together<br /><br />Social Firms UK<br /><br />Solace Womens Aid<br /><br />Somerset Youth Volunteering Network<br /><br />South Coast Moneyline<br /><br />South Craven Community Action<br /><br />South Yorkshire Housing Association<br /><br />Southey and Owlerton Area Regeneration<br /><br />Spurgeons<br /><br />St Anne’s Community Services<br /><br />St Helens Community Empowerment Network<br /><br />St Helens District CVS<br /><br />St John Ambulance in South and West Yorkshire<br /><br />St Vincent de Paul Society<br /><br />.staa-allotments<br /><br />Stone King Sewell Solicitors<br /><br />STRIDE<br /><br />Surrey Association for Visual Impairment<br /><br />Surrey Care Trust<br /><br />Sussex Central YMCA<br /><br />Sustainable Brampton<br /><br />Tenant Participatory Advisory Service Cymru<br /><br />The Camden Society<br /><br />The Chaseley Trust<br /><br />the connectives<br /><br />The Diocese of Worcester<br /><br />The Ecumenical Council for Corporate Responsibility (ECCR)<br /><br />The Foyer Federation<br /><br />The LankellyChase Foundation<br /><br />The Lantern Project<br /><br />The Oastler Centre for Faith in Economic Life<br /><br />The Young Foundation<br /><br />Theatro Technis<br /><br />Third Sector European Network<br /><br />Third Sector European Network<br /><br />Thurrock CVS (Council for Voluntary Service)<br /><br />Time to Let<br /><br />Titus Alexander, Novas Scarman Group<br /><br />Tower Hamlets Co-operative Development Agency<br /><br />Town and Country Housing<br /><br />Trust Thamesmead<br /><br />Turn2Us<br /><br />Tyne North Training<br /><br />Uday Thakkar<br /><br />Unite the Union<br /><br />United Response<br /><br />Unlimited Potential<br /><br />Urban Forum<br /><br />V2C<br /><br />Voluntary Action Barnsley<br /><br />Voluntary Action Elmbridge<br /><br />Voluntary Action North East Lincolnshire<br /><br />Voluntary Action Rotherham<br /><br />Voluntary Action Sheffield<br /><br />Voluntary Action Wakefield District<br /><br />Voluntary Action Westminster<br /><br />Volunteer Association Lewisham<br /><br />Voscur<br /><br />Walterton and Elgin Community Homes<br /><br />Walworth Garden Farm<br /><br />Warwickshire Association of Youth Clubs<br /><br />WCAVA<br /><br />Wearmouth Community Development Trust<br /><br />Wessex Community Action<br /><br />Wester Hailes Fiscal Factor (Financial Inclusion and Social Capital)<br /><br />Wirral CVS<br /><br />Wirral Holistic Care Services<br /><br />Wirral Information Resource for Equality and Disability<br /><br />Wolseley Trust<br /><br />Women’s Resource Centre<br /><br />Woodthorpe Development Trust<br /><br />Workers’ Educational Association<br /><br />YMCA Watford<br /><br />Yorkshire &amp; Humber Regional Forum<br /><br />Yorkshire Wiildlife Trust<br /><br />YOU<br /><br />Your Nutshell<br /><br />Z2K<br /><br />Zero-credit<br /><br />ZestDamon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-50845972498830709692010-04-21T16:17:00.002+00:002010-04-21T16:22:05.275+00:00Rip off TV - the advertWant to pay over the odds for your washing machine and other household goods? Want to pay back through pay as you view TV? No money, no TV. Not good.<br /><br />Well people in Stockton on Tees are now sending out a warning to the world about rip off TV - catch their fantastic video here:<br /><br /><a href="http://www.youtube.com/watch?v=Juu8RhperKk">http://www.youtube.com/watch?v=Juu8RhperKk</a>Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-35325166359335185772010-01-14T19:32:00.005+00:002010-01-14T19:43:05.168+00:00Rate cap power for OFT debated in Commons CommitteeRob Marris M.P (Lab, Wolverhampton South West), a member of the House of Commons Committee considering the Financial Services Bill, has put down a proposed amendment to the Bill which would provide the Office of Fair Trading with the power to cap credit charges. <br /><br />The amendments, which Debt on our Doorstep has helped to draft, provide for the OFT to review credit markets within six months of the Financial Services Bill becoming law to establish the level of price competition and if this is found lacking to impose a cap on the total cost for credit. Lenders who disregarded the cap could be fined or lose their consumer credit licenses.<br /><br />The amendments are being debated in Committee on 14th January although time for consideration is limited and the issue looks likely to be returned to at the Bill's Report Stage debate in the Commons in the next week. A memorandum of evidence to support the amendments has also been submitted by the <a target="_blank" href="http://www.responsible-credit.org.uk/index.html">Centre for Responsible Credit </a> which is available on <br /><a target="_blank" href="http://www.publications.parliament.uk/pa/cm200910/cmpublic/finser/memo/ucm1102.htm"> the Bill Committee website </a>Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-17677620034005245992009-12-21T08:21:00.003+00:002009-12-21T08:28:26.737+00:00Early Day Motion on Home Credit Market<div align="justify">Debt on our Doorstep is calling on all supporters to lobby their MP's to support an Early Day Motion (EDM number 379) put down by Ian McCartney M.P on the Home Credit Market.<br><br></div><div align="justify"> </div><div align="justify">The EDM, which has already attracted over 50 signatures, reads:<br><br></div><div align="justify"> </div><div align="justify">That this House notes the ongoing lack of price competition in the home credit market and the devastating impact that high cost credit is having on the poorest communities as reported by Channel 4's Dispatches programme on 7 December 2009; further notes that the Competition Commission's remedies for this market have not had any impact since its inquiry into the home credit market in 2006; further notes that Provident Financial now charges £82 for every £100 lent, which is 26 per cent. higher than was reported three years ago; further notes that Provident now have an estimated 70 per cent. of the market and that the `unfair credit relationship' test introduced by the Consumer Credit Act 2006 has not led to a single instance of prices being lowered; believes that urgent and effective action is now required to help low income borrowers obtain credit at a fair price; and calls on the Government to provide the Office of Fair Trading with a power to cap prices in non-competitive areas of the credit market, or the Competition Commission to immediately review its remedies for the home credit market and or the Financial Services Authority to introduce a rule requiring banks to demonstrate how they are helping to expand access to affordable credit, for example by partnering with credit unions.<br><br></div><div align="justify"> </div><div align="justify">Supporters are urged to write to their M.P's asking them to sign up to the EDM. The list of current signatories can be found at <a href="http://edmi.parliament.uk/EDMi/EDMDetails.aspx?EDMID=39940&amp;SESSION=903">http://edmi.parliament.uk/EDMi/EDMDetails.aspx?EDMID=39940&amp;SESSION=903</a></div><div align="justify"> </div><div align="justify"> </div>Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-53365380308864359172009-12-02T15:41:00.002+00:002009-12-02T15:48:43.472+00:00Speech to All Party Parliamentary Group on Credit UnionsA copy of Debt on our Doorstep Chair, Damon Gibbons, speech to the All Party Parliamentary Group on Credit Unions is now available <a href="http://www.debt-on-our-doorstep.com/files/DG_speech_APPG.pdf">here</a>Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-23707757007776620132009-11-25T17:30:00.002+00:002009-11-25T17:40:49.798+00:00New report highlights 'flawed' evidence base of Government policy on rate capsA new report from the New Economic Foundation has revealed that Government's previous decision in 2006 not to implement a rate cap was based on 'flawed' evidence. The report, Doorstep Robbery, reveals that a prior DTI funded study of interest rate caps in other countries ('the Policis Report') failed to meet even basic standards of social research. It also indicates that poor people in the UK are more likely to be financially excluded than in France and Germany as well as paying a much higher price for credit.<br /><br />The NEF report calls on Government to introduce a cap on the total charge for credit and for banks to be obliged to meet the needs of low income households for affordable credit either directly through the provision of overdraft credit or in partnership with credit unions.<br /><br />The full report can be downloaded from <a href="http://www.neweconomics.org/fairlending">http://www.neweconomics.org/fairlending</a> and is being launched tonight at the London Citizens Meeting in the Barbican Centre, which will see 2,000 people call for a cap on interest rates at 20% of the total charge for credit - see <a href="http://www.londoncitizens.org.uk/pages/newsarchive/2009-11-17-%20November%20Assembly.html">http://www.londoncitizens.org.uk/pages/newsarchive/2009-11-17-%20November%20Assembly.html</a>Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-74589388353436954282009-11-22T16:31:00.004+00:002009-11-23T18:58:55.821+00:00BBC Inside Out reports on the misery caused by Home CreditLow income borrowers using Home Credit are being charged amongst the highest costs to be found in the whole of Europe and the US. That's the shocking finding reported tonight on BBC's Inside Out programme to be broadcast in the West Midlands. The report, which was undertaken in Coventry also found that a huge amount of the local Citizen Advice Bureau's work was taken up in dealing with problems caused by just one company - Provident Financial.<br /><br />Our own review of prices charged by Provident has found that these have increased by 26% in just three years. This is despite the Competition Commission introducing measures in 2007/08 which were supposed to bring prices down!<br /><br /><br />Debt on our Doorstep has therefore today written to Business Secretary, Lord Mandelson, and called for immediate action to cap Provident's prices.<br /><br /><br />A copy of the letter can be downloaded from <a href="http://www.debt-on-our-doorstep.com/files/letter%20to%20Mandelson.pdf">http://www.debt-on-our-doorstep.com/files/letter to Mandelson.pdf</a>Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-21021029465520087532009-10-12T16:26:00.002+00:002009-10-12T16:39:25.138+00:00Transact members again vote rate ceilings as a priority for actionTransact members have again registered their support for interest rate ceilings to be introduced into the U.K as a matter of urgency. Over 40% of all members voting in the last survey put interest rate ceilings in their top three priorities. Only securing a universal right to basic banking (57%), expanding credit unions (52%), and a national roll-out of money guidance (45%) scored higher. <br /><br />Transact has 1500 members, of which 265 completed the survey. This indicates that we have the support of at least 108 consumer agencies in the UK for our campaign on rate caps.Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-58339006781963533072009-10-07T21:12:00.004+00:002009-10-07T21:29:22.907+00:00Government consults on Debt Management Plans but County Court IT systems hold up delivery of real assistance for debtorsThe Ministry of Justice, Department for Business, Innovation and Skills, and the Insolvency Service have launched a joint consultation over the potential need to place debt management plans on a statutory footing in order to improve the assistance to indebted households. At the present time many people in debt enter into voluntary debt management plans but are unable to get a proportion of their debts written off as they may be able to through a statutory scheme. As a result many of the Debt Management Schemes that are entered into are not sustained.<br /><br />In the consultation paper, Government also indicate that other possible sources of assistance - which formed part of the Tribunals, Courts and Enforcement Act 2007, such as Enforcement Restriction Orders which would have provided people with the opportunity of obtain a moratorium on debt recovery for up to a year - will not now be implemented until 2011 at the earliest due to the need to replace County Court IT systems.<br /><br />Dood will be making a full response in due course, but the delay over the introduction of Enforcement Restriction Orders is clearly disappointing and fails to fit with Government's commitment to provide 'real help now'. Alternative approaches may therefore need to be found - for example by the Treasury insisting that lenders who have received tax payer bail outs now offer moratoriums on debt collection for up to 12 months where someone has recently been made unemployed.Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-82190564995140612022009-09-30T17:49:00.006+00:002009-09-30T18:04:27.262+00:00Dood issues new seven point plan to reform financial marketsDebt on our Doorstep has today called for the Treasury to place more emphasis on protecting consumers in its strategy to deal with the financial crisis and to increase financial stability. In particular, Government should now legislate to allow the FSA and OFT to cap the cost of credit where it is apparent that these are reflective of high risks or where there is a failure of competition.<br /><br />The paper also argues that Government cash used to bail out the banks must be diverted to those that need it most including homeowners with little or no equity, rather than to the wealthy who are the only ones currently benefitting from historically low bank base rates.<br /><br />And noting that many people will now be defaulting on credit agreements and facing insolvency through no fault of their own, Debt on our Doorstep has also called for an immediate review of insolvency legislation and credit scoring mechanisms to ensure that people affected by the recession are rehabilitated back into mainstream financial services as soon as possible.<br /><br />The full paper is <a href="http://www.debt-on-our-doorstep.com/files/Reforming%20financial%20markets.pdf">available here</a>Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-33758693829639029322009-09-23T13:20:00.006+00:002009-09-30T17:49:27.846+00:00Cap the Total Charge for Credit not APR'sRecent discussions over interest rate caps have included concerns that DWP Growth Funds are being used by credit unions and community development finance institutions ('CDFIs') to lend out at APR's of between 30% and 40%. Because these lender's aren't driven by profit motives, it has led some to argue that interest rate caps would not be a practical means of delivering fairer prices to low income borrowers and that they would drive all types of lenders out of business.<br /><br />In fact there is no reason why price ceilings would not be an effective means of ensuring people aren't ripped off in uncompetitive credit markets including home credit or payday lending. Uncompetitive markets allow lenders to mark up prices over and above where they would be under normal market conditions. They therefore make excess profits. Caps can be used to reduce prices to the level where normal profits would be made - but should not be used to eliminate point profit altogether.<br /><br />The question therefore is where to put the cap, not whether it could work in principle. Capping the price of credit is more complicated than in other markets simply because the APR measurement of price is subject to vagaries. It is skewed against short term lending. The shorter the term of the loan, the higher the APR. As a result, a cap on the APR% could result in lenders simply lengthening the term of their loans in order to bring down the headline % figure. <br /><br />So let's focus on a different measurement of price - the total charge for credit. Provident Financial, the UK's largest door to door lender with over 50% of the market, charge about £65 for every £100 borrowed. That’s a Total Charge for Credit (TCC) of 65%. Payday lenders typically charge between 15% and 33% total charge for credit on the first month, but this figure doubles each time the loan is rolled over. As for credit unions and CDFI's, well APR’s of 30% to 40% may sound grim, but the total charge for credit on these loans lies between just 8% and 10%.<br /><br />We need to forget APR’s in this debate and support a cap on the Total Charge for Credit at somewhere around 20%. That would deliver real savings to low income borrowers and wouldn't put non exploitative lenders out of business, but it would ensure that Provident, for example, were no longer able to benefit from a lack of effective price competition and it would limit payday lender irresponsibility.<br /><br />Of course, there are alternatives to capping - for example by encouraging greater competition in the first place. But since the financial crisis has hit this is likely to take anything between four and ten years to happen. And it's already been 6 years since we first highlighted the lack of effective price competition in the door to door lending market, during which time by the Competition Commission's calculations around £0.5 billion has been taken out of the poorest communities in excess profit. <br /><br />So let’s not wait another decade to deliver fair prices. And let's not divide those that are on the side of low income borrowers – we know where the real problems lie. A united campaign for a cap now could make all the difference!Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-23276374684855860242009-07-30T17:15:00.002+00:002009-07-30T17:18:15.084+00:00OFT publishes draft guidance to prevent irresponsible lendingDebt On Our Doorstep today welcomed the draft guidance on responsible lending published by the OFT.<br /><br />Presenting his initial reactions to the document, Damon Gibbons, Chairman of Debt On Our Doorstep, commented:<br /><br />“This draft guidance is a huge step forwards for consumers. If implemented as currently drafted it would require lenders to make a proper assessment of a borrower’s ability to repay prior to granting a loan. We know that at the moment many lenders fail to make effective checks before lending, preferring to trap people in a cycle of increased borrowing. In the long term this has devastating consequences for low income households and communities.<br /><br />“The OFT is to be applauded by putting forward such robust proposals to deal with this problem and we look forward to working with them over the coming 12 week consultation period.”Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-50019201250842201812009-07-29T12:04:00.003+00:002009-07-29T12:22:06.917+00:00Barnardo's slams Provident rates of 545%Barnardo's 'Breadline Britain' report, published yesterday, rightly slams Provident's 545% APR loans to some of Britain's poorest families as 'extortionate'. The report comes on the same day that Provident announced a rise in pre-tax profits in the first six months of the year and following admissions from Provident Chief Executive Peter Crook that one of the effects of the credit crisis has been to drive people previously catered for by cheaper lenders to the high cost end of the market.<br /><br />But what is to be done about the problem? The OFT has today published it's Financial Strategy Action Plan which contains, amongst other things, an acknowledgement that competition in our credit markets has been curtailed by the crisis and is failing to deliver a fair deal for consumers.<br /><br />That comes as no surprise. In 2006/07 the Competition Commission investigation into door to door lenders found that nearly £100 million in excess profits were being made by firms in this market. But with competition weakening, the Commission's own remedies, which largely relied on people being able to build up a credit record and move onto cheaper, more mainstream types of borrowing, have failed to address the problem. The movement is all the other way.<br /><br />We now need urgent and direct action to address this failure. As part of its plan, the OFT is reviewing the high cost credit market and rightly considering the case for a cap on credit charges. In our view, this cannot come too soon and we will be submitting evidence on this issue to the OFT in late August. But the real need now is for supporting agencies to lobby their M.P's to support the introduction of legislation to cap credit costs before the next general election. If you are able to help with the campaign, please get in touch by e-mailing <a href="mailto:info@debt-on-our-doorstep.com">info@debt-on-our-doorstep.com</a>Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-80649324462993541552009-04-28T15:21:00.003+00:002009-04-28T15:30:51.798+00:00BERR Consults on Consumer Credit Directive<p>The Department of Business, Enterprise and Regulatory Reform is consulting on the implementation of the Consumer Credit Directive. The consultation, which was launched with little fanfare on the 14th April, will run for only 8 weeks (as opposed to the usual 12), in order to provide lenders with a longer lead in time to accommodate any changes.<br /><br />The UK process for implementation of the Directive has been dominated by industry interests, with 'expert groups' established comprising of industry representatives whilst consumers have been provided with few opportunities for input. The curatiled consultation period will once again put them at a disadvantage in making their response.<br /><br />The consultation document is available from <a href="http://www.berr.gov.uk/files/file50962.pdf">http://www.berr.gov.uk/files/file50962.pdf</a><br /><br />The Directive covers:<br /><br />the information that must be provided to consumers at pre-contract, contract, and post contractual stages<br /><br /><li>information to be included in advertisements</li><br /><br /><li>early repayment</li><br /><br /><li>APR calculation</li><br /><br /><li>a duty on lenders to provide adequate explanations of the credit offer</li><br /><br /><li>an obligation to check the creditworthiness of the consumer</li><br /><br /><li>the right for consumers to withdraw from an agreement within 14 days</li><p></p>Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-9911047590096285342009-04-08T12:50:00.002+00:002009-04-08T12:59:33.261+00:00OFT consults on Financial Sector StrategyThe OFT has launched a consultation on its proposed financial services strategy which sets out its approach to the sector in response to the current economic crisis, and also announced a review of the unsecured consumer credit market.<br /><br />The OFT is asking interested parties to comment on its proposal to focus on two inter-related themes:<br /><br />• The prioritisation, in the short term, of promoting fairness and responsibility between the credit industry and consumers, and<br /><br />• advocating choice and competition to ensure that public decisions made to deal with the current crisis do not harm competition in the long term to the detriment of consumers.<br /><br />The consultation will run until 12 June 2009, and the consultation document can be <a href="http://www.oft.gov.uk/advice_and_resources/resource_base/consultations/current/financial-services">downloaded here.</a><br /><br />A review of the unsecured credit market is also being scoped out, with details available from:<br /><br /><a href="http://www.oft.gov.uk/oft_at_work/markets/services/credit-sector/">www.oft.gov.uk/oft_at_work/markets/services/credit-sector/</a>.<br /><br />Comments are currently being invited concerning this until 8th May, with the full review expected to start in the summer.Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-8928458265195622592009-03-30T19:35:00.003+00:002009-03-30T19:46:01.301+00:00Global Coalition for Responsible Credit calls on G20 leaders to create a financial system ‘worth saving’<p>Debt on our Doorstep, with support in the UK from the trade unions UNITE and PCS, the New Economics Foundation, Church Action on Poverty, the National Housing Federation, and former Cabinet Minister and Chair of the Labour Party Ian McCartney M.P, and with the support of a Global Coalition for Responsible Credit comprising the European Coalition for Responsible Credit, the U.S National Community Reinvestment Coalition, and partners in twenty other countries, today issued a call for the forthcoming meeting of the G20 to commit itself to the creation of a financial system that is worth saving by:<br /><br /><li> Agreeing to place financial services providers under a ‘duty to exercise responsibility in financial services’. Financial services providers need to be required to sign up to clear principles of responsibility and to have transparent mechanisms in place to ensure that these principles guide their behaviour in practice. Remuneration policies need to be reassessed in the light of this ambition. The responsibility should include a requirement for financial services providers to properly consider the needs of all households, including those on low incomes, when designing financial products </li><br /><br /><li> Ensuring taxpayer investment in the banking system is turned into real help for people in financial difficulties, by agreeing actions to force lenders to offer to reschedule the liabilities of households in debt over the long term at affordable rates </li><br /><br /><li> Committing to take further action to stop home repossessions and ensure lenders offer affordable mortgages to people in negative equity and/or mortgage arrears, and to work to stabilise housing costs in the longer term by increasing the supply of affordable housing.</li><br /><br />Chair of Debt on our Doorstep, Damon Gibbons, commented:<br /><br />“Financial services providers have engaged in irresponsible and usurious lending, causing households to become increasingly vulnerable to economic shocks and saddling them with unsustainable levels of debt. We call on the G20 to signal a decisive break with the short termism, greed, and irresponsibility that have caused the current crisis and to take action to ensure that taxpayer investment in the banking system is now used to create a system that benefits people.”<br /><br />Supporting the work of the Global Coalition, Andy Case, a National Secretary for Unite, the UK’s largest trade union with 2 million members, including 178,000 working in the Finance Sector, said:<br /><br />“The current situation provides an opportunity to re-build a financial system that supports a long-term outlook and is consistent with democratic aims, financial stability and social justice."<br /></p>Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-75264335210736397132009-02-14T12:44:00.004+00:002009-02-14T12:52:50.906+00:00Protecting low income borrowers in the credit crisisDebt on our Doorstep and Ian McCartney M.P have now finalised their report on measures that government can be taking to protect low income borrowers in the credit crisis. The full report is available from the link below.<br /><br />The report has now been submitted to the Department of Business, Enterprise and Regulatory Reform and the Treasury and we are hopeful of a meeting in the near future. <br /><br />In the meantime, the proposal to cap prices in non-competitive areas of the credit market is gaining further support with Transact members voting this as one of their top three priorities for action in a survey at the end of 2008. Following the Transact Annual conference London in November, we understand that there will be a number of regional debates organised on this issue in Spring 2009.<br /><br /><a href="http://debt-on-our-doorstep.com/files/Protecting low income borrowers in the credit crisis.pdf">Protecting low income borrowers in the credit crisis</a>Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-63163051414483239142009-02-14T12:31:00.002+00:002009-02-14T12:39:55.057+00:00Government urged to bring forward introduction of enforcement restriction ordersDebt on our Doorstep and John Battle M.P have teamed up in a bid to get government to bring forwards the introduction of enforcement restriction orders. The Tribual, Courts and Enforcement Act passed by Parliament in 2007 contains provisions for the county courts to make the orders were a debtor's financial circumstances have significantly worsened since taking out credit, and allow for debt recovery action to be suspended for up to 12 months. With rapidly rising levels of redundancies and unemployment, the orders would provide real help now to many households struggling to cope with the recession.<br /><br />However, following a parliamentary question from John Battle to Bridget Prentice at the Ministry of Justice, it would appear that the introduction of enforcement restriction orders is not scheduled until 2010. <br /><br />We believe that is far too late and urge government to act now.<br /><br />John has put down an Early Day Motion on the subject which is available from the link below. Please write to your M.P and urge them to add their signature.<br /><br /><a href="http://edmi.parliament.uk/EDMi/EDMDetails.aspx?EDMID=37814&SESSION=899">http://edmi.parliament.uk/EDMi/EDMDetails.aspx?EDMID=37814&SESSION=899</a>Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-2317123764641704072008-11-30T17:34:00.003+00:002008-11-30T17:59:24.660+00:00Ian McCartney M.P to work with Dood on Rate Cap proposal<div align="justify">Ian McCartney M.P today announced his intention to work with Debt on our Doorstep in order to develop a proposal to introduce a system of interest rate caps, which he will submit to the Chancellor, Alistair Darling, and Business Secretary, Peter Mandelson at the end of the week.<br><br></div><div align="justify"> </div><div align="justify"> </div><div align="justify"></div><div align="justify">The announcement came during a live interview on the BBC's Politics Show, North West, in which Damon Gibbons, Chair of Debt on our Doorstep also took part.</div><div align="justify"> </div><div align="justify"> </div><div align="justify"></div><div align="justify"><br><br>The full show can be viewed from the following link, with the coverage from the North West starting 33 minutes in.<br><br></div><div align="justify"> </div><div align="justify"> </div><div align="justify"></div><div align="justify"><a href="http://www.bbc.co.uk/iplayer/episode/b00fvxd1/The_Politics_Show_30_11_2008/">http://www.bbc.co.uk/iplayer/episode/b00fvxd1/The_Politics_Show_30_11_2008/</a></div>Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-30461046810488226862008-11-22T16:22:00.003+00:002008-11-22T16:30:03.218+00:00Show your support for the 'London Declaration' on the Global Credit Crisis<strong>London Declaratation on the Global Credit Crisis - all agencies urged to indicate their support by signing at <a href="http://www.responsible-credit.net/index.php?id=2738">http://www.responsible-credit.net/index.php?id=2738</a></strong><br /><strong></strong><br /><strong>Text of the Declaration follows</strong><br /><strong></strong><br /><strong>Introduction<br /><br /></strong><strong></strong><div align="justify">On 13th November 2008, two hundred delegates drawn from twenty six countries gathered in London to discuss the global credit crisis. The conference recognised that taxpayers all over the world are now being required to foot a mounting bill to rescue banks and financial institutions. Yet, it is households who are feeling the worst effects of the meltdown in the global financial system. Consumers, who have been encouraged to take on excessive housing and consumer debt, are now struggling to avoid repossession and insolvency, savings and pensions are threatened, and unemployment is rising.</div><div align="justify"><br /> </div><div align="justify">Our discussions were informed by the Council of Europe's Recommendation (Rec/(2007)8) concerning legal solutions to debt problems, which sets out a framework for Member States to#</div><ul><li><div align="justify">Provide measures that will prevent over-indebtedness </div></li><li><div align="justify">Alleviate the effects of debt recovery, and </div></li><li><div align="justify">Rehabilitate over-indebted individuals and families </div></li></ul><div align="justify"><br />There was widespread support for the Council of Europe's framework at the conference, but also recognition that in many Member States the measures that were currently in place failed to take account of the crisis situation now facing households. </div><div align="justify"> </div><div align="justify">Delegates therefore supported the making of the following declaration</div><div align="justify"><br /> </div><div align="justify"><strong>The London Declaration</strong></div><div align="justify"><strong><br /> </div></strong><div align="justify">We, the European Coalition for Responsible Credit, with the support of our partners around the globe, call on our governments, financial regulators, and central banks, to take immediate action to support households in financial problems and to work with us and other consumer and social agencies, academics, and the labour movement to establish a new framework for the governance of credit markets at the international, European, and national levels.</div><div align="justify"><br />The current crisis is a product of the long term neglect of consumer interests in the credit markets and inadequate regulation of the financial services industry. Over the past twenty years we have witnessed the continued weakening of consumer protections in the name of supporting free and efficient markets. The failure of this approach in the credit market is now self evident. This is not a crisis borne from providing access to credit to low income groups, but it is a product of providing them with irresponsible credit products and failing to protect their long term interests in the market.<br /></div><div align="justify">We call on all governments across Europe to<br /></div><div align="justify"><strong>Improve help available to households in mortgage arrears</strong>, by<br /></div><div align="justify">Establishing, with the financial services industry, ‘mortgage rescue funds’ for households that can be used to help borrowers restructure mortgages at affordable rates of interest over the next five to ten years<br /></div><div align="justify">Providing courts with the power to halt the repossession of homes and to restructure mortgages by accessing ‘mortgage rescue funds’ </div><div align="justify"><br /><strong>Enhance court protection for borrowers with unsecured debts,</strong> by<br /></div><div align="justify"> </div><div align="justify">Providing for borrowers to obtain, on their own application, a temporary moratorium on recovery action for up to one year, subject to judicial discretion<br /></div><div align="justify">Preventing unsecured lenders from obtaining legal charges on homes </div><div align="justify"><br /> </div><div align="justify"><strong>Ensure adequate provision of debt advice services</strong> by developing and implementing, with the active involvement of consumer and social agencies, a national debt advice plan. The plan should be developed following the commissioning of independent research into the demand for, and supply of, debt advice provision and current funding levels for advice services</div><div align="justify"><br /> </div><div align="justify"><strong>Include a duty in bank and credit licenses obliging lenders to ensure people on lower incomes have access to responsible credit products</strong>, and which requires lenders to report in a standardised and public way on their performance in meeting this obligation<br /></div><div align="justify">Improve governance of credit markets by actively involving consumers<br /></div><div align="justify">Ensure that consumer and social agencies are represented on key policy making and supervisory bodies at the global, European, and national levels </div><div align="justify"><br /> </div><div align="justify"><strong>Provide financial support to enable consumer and social agencies to participate</strong> in an ongoing dialogue with regulators and the financial services industry at the global, European, and national levels </div><div align="justify"><br /> </div><div align="justify"><strong>Develop a quasi bankruptcy procedure for banks</strong> which instead of just applying the principle of "too big to fail" provides the intervening State with the right to replace management, to adjust claims and to protect public interest in failing financial institutions without harming the well-functioning of the bank's systems with regard to the markets. Public guarantees and subsidies to banks should be given only with the obligation to act responsibly towards consumers and to return the money after it is no longer necessary to keep the bank from failure. </div><div align="justify"><br /> </div><div align="justify">Signed this 13th November 2008</div><div align="justify">Professor Udo Reifner</div><div align="justify">Chair, European Coalition for Responsible Credit</div>Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-30247580712971401392008-11-22T15:19:00.003+00:002008-11-22T15:27:13.833+00:00Responding to the Mortgage Crisis<div align="justify">With repossessions at their highest level since the housing market crash of 1991, and more than 30,000 people set to lose their homes on current trends before next April, a new report from the Centre for Economic &amp; Social Inclusion argues that radical measures should now be taken to help hard pushed borrowers reduce mortgage payments and to improve court protection against repossession.</div><div align="justify"><br />The report highlights the fact that the cost of mortgage repayments, relative to household income, has been steadily increasing since 2004. This has now been combined with a ‘de-coupling’ of mortgage rates from bank base rates as a result of the global financial crisis – causing the cost of borrowing to rise rapidly, a surge in arrears, and a rush to repossession by lenders who have also seen house prices fall dramatically.</div><div align="justify"><br />Pointing out the more pro-active approaches now being taken by regulators in the U.S where ‘loan modification’ programmes are now being introduced to ensure no-one pays more than 34% of their income on mortgage repayments, Damon Gibbons, Head of Policy and Partnership at Inclusion, commented:</div><div align="justify"><br />“Restoring mortgage affordability is critical to reducing the number of repossessions. There is a strong case for government to insist that banks introduce a mortgage restructuring scheme in the U.K in order to achieve this. The new UK Financial Investment Company should ensure it uses the £37 billion of taxpayer investment in Britain’s banks as a lever to achieve this.”</div><div align="justify"> </div><div align="justify"> </div><div align="justify">The full report is available here : </div><div align="justify"> </div><div align="justify"><a href="http://www.debt-on-our-doorstep.com/files/Responding%20to%20the%20Mortgage%20Crisis.pdf">http://www.debt-on-our-doorstep.com/files/Responding%20to%20the%20Mortgage%20Crisis.pdf</a></div>Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0tag:blogger.com,1999:blog-7897907131166165265.post-27480455212785470142008-11-22T14:53:00.003+00:002008-11-22T14:57:26.260+00:00Transcript of speech to Transact ConferenceA copy of the speech given by Damon Gibbons, Chair of Debt on our Doorstep, to Transact's National Conference on 21st November concerning the problem of credit dependency and the need for interest rate caps in the UK is now available from the following link<br /><br /><a href="http://www.debt-on-our-doorstep.com/files/Speech%20to%20Transact%20Conference%20Gibbons%2021st%20November">http://www.debt-on-our-doorstep.com/files/Speech%20to%20Transact%20Conference%20Gibbons%2021st%20November</a>Damon Gibbonshttp://www.blogger.com/profile/10318849984688614666noreply@blogger.com0